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MARKET POWER AND PRICE TRANSMISSION OF AGRI-FOOD SUPPLY CHAIN IN TANZANIA

KrishiKosh

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Field Value
 
Title MARKET POWER AND PRICE TRANSMISSION OF AGRI-FOOD SUPPLY CHAIN IN TANZANIA
 
Creator CHONGELA, JOEL
 
Contributor VASUDEV, N.
 
Subject marketing, markets, productivity, economics, costs, demand, biological phenomena, grain, economic systems, supply
MARKET POWER, PRICE TRANSMISSION, AGRI-FOOD SUPPLY CHAIN, TANZANIA
 
Description The study is quantitative in nature focused on investigating market power and price transmission of agri-food supply chain using time series data set collected from 1981 to 2010 period in Tanzania. The study calibrated the impact of market power on food policy, estimated the price transmission of agri-food supply chain, estimated marketing efficiency along the agri-food supply chain, compared price transmission of agri-food prior and post trade liberalization era, and examined the contribution of agri-food sector to Tanzanian economy.
The Dynamic Computable General Equilibrium (DCGE) model was employed to calibrate the impact of market power on food policy using four sectors of the economy namely; producers, consumers, government and foreign. The Constant Elasticity of Substitution (CES), Almost Ideal Demand System (AIDS), Socioeconomic Influence Model (SIM), Consumption Expenditure Model (CEM) and, Export and Import Model (EXIM) were developed in the DCGE model. The Error Correction Model (ECM) was employed to estimate price transmission of agri-food along the agri-food supply chain. Shepherd’s Index (SI) formula was employed to estimate marketing efficiency of agri-food along the agri-food supply chain. The Mean Model (MM) was developed to examine contribution of agri-food sector to Tanzanian economy.
The empirical study revealed that market power of four sectors of the economy has significant impact on food policy with parameter coefficients of 280.79650, 59.56319, 29.56194 and 18.06034 for government consumption expenditure in agricultural sector (Gt), agri-food business firms investment (It), households food consumption expenditure (Ct) and agri-food net exports (Xt), respectively, which are statistically significant at 5% level of significance.
The sensitivity of agri-food consumer demand system to changes in own price and income were -0.858 and 0.956, respectively, for aggregated 18 food groups. However, the study revealed that the households’ food budget share is 59.6% of the
disposable income per month. The food consumption priority is for cereals, followed by vegetables, meat and poultry products, roots and starch followed by pulses, sugar and sweets. Moreover, cereal products, fats and oils seeds, and soft drinks are the next major products consumed in the country. Therefore, government interventions in terms of food subsidies, priority should be given to these kinds of food which constitute large amount of food budget share of the households.
The empirical results revealed that price transmission of monthly producer and consumer prices of maize grains, rice, sorghum grains, wheat grains, and dry beans was significant at P < 0.0001 implies that prices were transmitted from the upstream to downstream. Moreover, the empirical study found that marketing efficiency of agri-food along the agri-food supply chain was high in chain IV due to lessening of marketing intermediaries who reduce the profit margins of producers along the supply chain I, II and III.
Furthermore, the empirical findings revealed that price transmission of agri-food during prior trade liberalization era was robust positively correlated with correlation coefficients (r) of 0.9802, 0.9750, 0.9681, 0.9565 and 0.9348 for dry beans, rice, maize, wheat and sorghum grains, respectively, as compared to price transmission during post trade liberalization era which was correlated with correlation coefficients (r) of 0.9697, 0.9526, 0.9236, 0.8667 and 0.8653 for rice, wheat, dry beans, maize and sorghum grains, respectively. The empirical result showed that share of real AgGDP to national real GDP is 25.88%, contributed by crops subsector (18.93%); livestock subsector (4.70%) and fishing subsector (2.25%).
Moreover, the study suggested that government interventions in terms of policy instruments such as food price stabilization and welfare income distribution policies should be formulated as economic stimulus packages to food consumers, so that to promote normal food consumption by shifting from inferior food.
However, the methodology and empirical findings of the study are useful to agri-food researchers, scholars, producers / farmers, processors, distributors, wholesalers, retailers, consumers, and policy makers in Tanzania.
 
Date 2016-06-09T16:04:37Z
2016-06-09T16:04:37Z
2013
 
Type Thesis
 
Identifier http://krishikosh.egranth.ac.in/handle/1/67145
 
Language en
 
Relation ;D9285
 
Format application/pdf
 
Publisher ACHARYA N. G. RANGA AGRICULTURAL UNIVERSITY